Washington, DC, is encircled by Interstate 495 (Capital Beltway). Many government workers retire on a pension and then set up consulting firms along the Beltway. These highly paid individuals—who trade off their government connections and knowledge—have been dubbed “Beltway bandits” (or “beltway bandits”) since at least 1976.
 
   
Wikipedia: Beltway bandits
Beltway bandit is a term for private companies located in or near Washington, D.C. whose major business is to provide consulting services to the US government. The phrase was originally a mild insult, implying that the companies preyed like bandits on the largesse of the federal government, but it has lost much of its pejorative nature and is now often used as a neutral, descriptive term.
 
The name comes from the Capital Beltway, the ring road that surrounds Washington. (The entire road is officially called Interstate 495, although the eastern half is cosigned with Interstate 95, which traverses most of the East Coast.) The majority of private contractors are located, or at least headquartered, at intersections along this road in order to be close to federal agencies and legislators. There is a tendency for contractors for the various civilian departments and agencies to locate along the Maryland portion of the Beltway, while defense contractors locate nearer to the Pentagon, along the Virginia section.
 
Wiktionary: Beltway bandit
Noun
Beltway bandit (plural Beltway bandits)
1.A consulting or research company that performs mostly work for US government departments or agencies.
2.An employee of such a firm, especially a former employee of the firm’s clients.
 
Google Books
The Raid
By Benjamin F. Schemmer
New York, NY: Harper & Row
1976
Pg. 290:
He is a vice president of the BDM Corporation, a civilian think tank largely involved in studies for the Department of Defense and one of the few so-called Beltway Bandits with a reputation for innovative, creative research.
 
Google News Archive
5 December 1977, Times-Union (Warsaw, IN), “Consulting Firm Aids Agriculture Department” by Jo Thomas (New York Times News Service), pg. 12, cols. 2-3:
The consulting business is in large part a child of the computer age and the demand of government departments for systems analyses (sic) to design, justify or evaluate their programs, policies or organizational structures. Originally, these agencies lacked the expertise to perform such functions themselves, and their expenditures helped build the clusters of consulting offices that hug the Beltway, the interstate highway that circles Washington. Their occupants have to come to be dubbed “Beltway bandits.”
(Originally published in the New York Times on the same day—ed.)
   
Google Books
January 1978, Mother Jones magazine, “Gravy Train,” pg. 63, col. 2:
Academics have excelled in the field, and the combination of Beltway Bandits, bureaucrats and university contractors is responsible for most of the puffball phrases introduced into the langue over the last dozen years….
 
25 January 1978, Washington (DC) Post, story by Jerry Knight:
Some “Beltway bandit” ought to be hired to put one team of computer experts to work designing crime-proof defenses.
 
June 1979, Harper’s magazine, pg. 48:
There are also the consultants—the “beltway bandits,” as they are sometimes called. These are the people who do government work for a fee.
 
Google News Archive
29 September 1979, Sarasota (FL) Herald-Tribune, “The Rise of the ‘Beltway Bandit’” by Jack Anderson, pg. 7A, col. 1:
WASHINGTON—In Washington, old soldiers never die—they become government consultants.
 
Not content with their military pensions, many retired officers decide to use the expertise—and the contacts—they acquired in service to climb aboard Uncle Sam’s gravy train as private contractors. So many of them have hung out their consultants’ shingles in office buildings along the circumferential highway around the capital that they are known, only partly in jest, as the “Beltway Bandits.”
 
Google News Archive
19 February 1984, Ocala (FL) Star-Banner, “On Language: ‘Beltway Bandit’ Is New ‘In’ Phrase For Washington” by William Safire, pg. 5E, col. 1:
Trying to get a piece of the action, said the hero of David Wise’s spy thriller, “The Children’s Game,” in giving a cover story to another former member of the CIA. “No reason the beltway bandits should get it all.”
 
The novelist, who in real life is a correspondent covering the cosmos of the clandestine, goes on to explain what his character means: “The beltway bandits were the dozens of research and development firms scattered around Washington in northern Virginia and Maryland.
 
Staffed mostly by former government officials, the bandits lived off government contracts, performing research on weapons, electronic warfare, antiterrorism and similar subjects for the Pentagon, the CIA, NSA and other agencies.”
 
OCLC WorldCat record
Jazz from hell [sound recording] / Frank Zappa.
Author: Frank Zappa
Publisher: Salem, MA: Rykodisc, 1986.
Edition/Format:  Music : English
Notes: Instrumental rock music./ Compact disc./ Digital recording./ Participants: Frank Zappa, guitar ; with assisting musicians./ Recorded at UMRK.
Night school (4:48)—The beltway bandits (3:28) 
 
OCLC WorldCat record
Beltway Bandits
Author: D Corn
Edition/Format:  Article
Publication: NATION -NEW YORK- 255, no. 17, (1992): 620
Database: British Library Serials
 
OCLC WorldCat record
Beltway bandit
Author: Perry L Shuman
Publisher: Huntington, W.V. : University Editions, Inc., ©1994.
Edition/Format:  Book : Fiction : English : 1st ed
 
OCLC WorldCat record
Business - The new Beltway bandits?
Author: Roya Wolverson
Publisher: [Slough, England : Newsweek Int.,
Edition/Format:  Article : English
Publication: Newsweek. 150, no. 23, (2007): 52
Database: ArticleFirst