If the entire basis of Congressional hearings is that Congress should legally have oversight, and whistleblowers are whistleblowing on projects that don't, then I don't see how even the excuse that contracts were handed to non-government entities that Congress have no jurisdiction over ( an excuse I have seen made ) makes any difference.
If the company is non-government then one surely also negates government classification rules. They surely can't have it both ways. If government level classification applies then government has 'oversight' as it is government that would enforce the classified info.
Agree the whole "UFO whistle-blower" thing creates a bit of a conundrum. As
@JMartJr pointed out above, it creates this scenario where one can often share just enough information to be intriguing, yet not enough to actually confirm anything.
I always thought Grusch's claims of the 1934 Italian UFO, something he's repeated often, is a classic case. The likely forged documents the story is based on are public record. The added elements of the Pope alerting the Americans and the UFO being spirited away to Hanger 18 by US special forces all come from serial fantasizer Billy Brophy. Again, this is all public domain material. So, what exactly is Grusch sharing? There is nothing classified here, unless of course the Italian documents and Brophy's wild stories are all accurate. But if that's the case, the classified story has long been out in the public.
If Grusch is to be believed, these UFOs have been hidden from Congress since the beginning of the 20th century. The whole idea that private contractors have the crashed UFOs is an excuse for why Congress can't find them. Despite repeated hearings, there is no resolution, just stories. The reality is, all any of these people have is stories passed down and around and then "revealed" by whistle-blowers.
Obviously, there are times when the government can impose classification rules on non-government private companies via contracts. Things like the U2, the A12 or the F117 were developed by private companies for the US military under US government classification rules. Multiple private companies, like EE&G, operated all kinds of stuff at Groom Lake/Area 51 under classified government contracts. I guess the UFOlogist could argue the same applies to recovered UFOs that the government has passed onto private contractors. BUT, that doesn't mean there is no congressional oversight.
Programs like AAWSAP show that small amounts can be spent without people noticing for a short period of time, but eventually it's found out. There are black budget items, but supposedly at least a few people in Congress are aware of where much of the money is going. Just not the few Congress people that claim the US is hiding UFOs.