I find this fairly idiotic and mostly looking for connections that probably aren't there (the entire "tin foil hat" argument).
Now, just as a disclaimer, I don't know the full picture nor do I claim to know the full picture (especially since "Silicon Valley" can be expressed as any technology company based out of this location which is a TON). However, this is the thoughts I had from reading the article.
1. Governments are run by contractors.
If anyone has ever worked in the public sector, you will know the government is literally run my contractors. The purpose of a contractor is to get the work you needed done at the cheapest price with no other strings attached. You tell them what needs to be done, you pay a lump sum, and then the contracting company handles everything else. While there's problems associated with the entire contracting system (like a company not having the proper resources being able to send in a bid, etc.), the entire "According to Lofgren, 70% of our intelligence budget goes to contractors." is a "no shit sherlock" answer. I'd probably say that around 85% of the researchers in the public sector are working as contractors (or as part of a contracting company) to their governments. The Intelligence Community is simply doing the same thing everyone else does. But let's say for the sake of argument they say "but intelligence is something sensitive and should be only managed by a government employee!" (since that's what most people would say anyways). There's nothing that makes the intelligence industry different than any other industry. Even then, how would a government hire an individual in this industry? It's all with contracts, which honestly can be also applied to any contracting company they hire. This entire statement that "70% of our intelligence budget goes to contractors" is simply used for sensational purposes. Of which is the idea that that money could be spent elsewhere more efficiently. Surprisingly (or moreover no way!), these contracting companies pays for people's livelihood, which keeps them out of the food stamp lines and removes one of the reason people would steal and get incarcerated (because they can actually afford a living). Of course the author goes with the sensational approach and immediately state that "Wall Street" and "The Federal Government" are out to get you and screw everyone. I don't have the statistics available in front of me but I'd like to say my assumption is that in the Intelligence Industry the Public Sector projects are probably the biggest contributor to the entire industry. So again, them sensationalizing this argument by saying "they've built the equivalent of three Pentagons" is simply showing how big the actual Intelligence Industry is. A quick google shows that the cost of constructing the Pentagon was 83 million dollars (adjusted to 1.33 billion in 2015 dollars). Assuming 2015 rates, that's a total of 3.99 billion dollars for building three Pentagons. But the article also states we're talking "since 9/11", we're talking the cumulative cost since 2001 (so 14 years of operation). Assuming that's distributed evenly, the total cost comes to 285 million dollars each year. That actually sounds really small for an entire professional industry that is considered critical and important to national security (I mean come on, War in Iraq racked up the total bill of 1.64 trillion dollars, surely they probably tossed a few billions to the Intelligence Industry right?). I'm going to suggest fact checking the entire article before believing in it...
2. Former General and CIA Director David Petraeus becoming a partner at the KKR Private Equity Firm
Ok. Let's be absolutely reasonable here. Being the head of a major (and strong) US Government organization shows that you're one of the top specialists and professionals in the field. But, being the big cheese of such a big organization, means you have leadership characteristics. Some of these leadership characteristics includes specific skills such as decision making, which is an actual science and is used in every single corner of any industry. Having good decision making skills means you have good problem analysis skills, and (since he's part of a major organization), good post-decision analysis skills (like who will I piss off if I make this decision). Since the KKR Private Equity Firm does very similar things except in the FIELD of Finance, you can probably see why this individual may be someone they want on staff. While the science behind the problem may be different, in the end we all know in the end the decision making process is the same. Just like why my research lab recently brought in a PhD expert from Business Analytics. The guy (before entering our lab) didn't really know too much about Hydrology, however both are heavily statistics based and (besides for the initial equation being different) are very similar. Gathering a large amount of data, performing analysis on those data (using different equations), and then performing an analysis on the data output.
So this isn't very surprising especially since he's at the "management" side of the work.
Wow this has already gotten fairly long. I'll just leave this alone like this but with a final message. This entire article, in my opinion, smells like absolute horse turd and something someone wrote simply for sensational purposes (and just getting clicks). I'd do your own research and cross-check this guy's "research" since he makes some claims that aren't even an issue (such as the "Government pays 70% of its intelligence budget to contractors" argument).