The likely explanation is not that they are stupid, but that they are actually being rational and they can do this often and get away with it.

I think you're right. I can't think of any reason an entire organization would act this way unless it had been repeatedly successful for them in the past.

Its a different kind of rational though. There is a world leader who gets away with all kinds of obvious theft and bribery and grift and fraud and self-serving out in the open, but to reasonable people, he doesn't seem rational at all, despite getting away with everything.

Yep, I meant rational in the purely self-interested sense