Institutional Paranoia is a term coined by John Anderson of diymedia.net, in a post on the HFUnderground.com message board. It is generally meant to refer to the relatively higher concerns US HF pirates have about enforcement, vs FM pirates, and shortwave pirates in Europe.
I've been writing about FCC enforcement activity against pirates for nigh on 15 years now (and I guess this still makes me a newbie!). But, please, rest assured: HF pirates are extremely low on the totem pole of the FCC's enforcement priorities.
It is correct that the FCC's Enforcement Bureau has been slashed, and that busts are nearly unanimously complaint-driven. This is because the FCC cares much, much, much more about interference from bi-directional cellphone amplifiers, cell-jamming devices, cable systems leaking RF, and ad-hoc two-way radio systems run by the private businesses - not to mention the enforcement activity they must do involving licensed broadcasters - than they do about pirates (on all bands).
I'm a big fan of the concept of relative risk, and I think in the case of HF anti-pirate enforcement, when you're dealing with a relatively small community of ops, the bust of one or two sets of alarm bells that are much louder than they would be in, say, the FM pirate community. There is also a level of institutional paranoia among HF pirates (and I don't mean this in a negative fashion) that you don't find among AM/FM folks; I think this derives directly from the mentality Andrew was talking about in the 70s-80s.
Then again, the federales give you a NOUO: so what? They follow up with an NAL: so what? At the THIRD step (forfeiture), you respond with three years of tax returns showing you're poor as hell, and the FCC is statutorily required to reduce (or even cancel) the fine. This is why several FM pirates, for example, have had their fines reduced from $10-25k to $250-500. Ouch, indeed.
Then there's a question of the FCC actually collecting on forfeitures - the rate is abysmal. The folks out in the field are just the first point of contact; when you realize that the "support network" of the enforcement bureaucracy behind them is more tattered than swiss cheese, it's so much easier to make that assessment of relative risk, and find that it's pretty damn low, especially today.
(I'll defer on the allegations of snitchery, which provides no meaningful enlightenment on enforcement activity....and strikes me as something straight out of eighth grade, which I left behind a quarter-century ago.)
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