One wonders how tainted Linux is, if one considers systems including SELinux. Yes, I realise the point of SELinux is to make it more secure, but the association with the NSA (they created it) makes it very difficult to trust.

What can you possibly mean? It's open source i.e. code is available to anyone's inspection.

But who does inspect it, not me for sure. So, how safe actually is Linux? And how safe is any distribution?

The fact that it is available for everyone to inspect means it can be peer reviewed: http://en.wikipedia.org/wiki/Peer_review

That doesn't mean you're supposed to review it or that it is reviewed at all, but it is a requirement for the open source development model.

About the Linux kernel, see this example: http://kernelnewbies.org/UpstreamMerge

From Quality control section: "Some of the world's best developers will be going over your source code with a fine comb. This may be embarrassing for a few days or weeks, but in the end the code tends to work better and be more easily maintained. In some cases the upstream developers have made network and storage drivers 30% faster, making the hardware more attractive to customers."

It's definitely better then not open source, but still I'd love to know more about those "world's best" developers and who pays them.

Open source is the necessary but not the sufficient condition. It needs to be reviewed by independent people, otherwise the open source part is useless.

It's also safe to say that the NSA are not completely stupid. Any nefarious code would unlikely be completely obvious, even to top developers.

Putting aside the point that it's open source, most distributions don't ship it. Ubuntu / SuSE use AppArmor.

RedHat / Fedora ship with SELinux.

Yes - especially when you recall that projects like OpenBSD have previously [0] been accused of having backdoors in its IPsec stack, as an example.

[0] http://marc.info/?l=openbsd-tech&m=129236621626462&w=2

and an utopia