[governance] Wider Spying Fuels Aid Plan for Telecom Industry

[Riaz K Tayob]

December 16, 2007
Wider Spying Fuels Aid Plan for Telecom Industry
By ERIC LICHTBLAU, JAMES RISEN and SCOTT SHANE

WASHINGTON — For months, the Bush administration has waged a 
high-profile campaign, including personal lobbying by President Bush and 
closed-door briefings by top officials, to persuade Congress to pass 
legislation protecting companies from lawsuits for aiding the National 
Security Agency’s warrantless eavesdropping program.

But the battle is really about something much bigger. At stake is the 
federal government’s extensive but uneasy partnership with industry to 
conduct a wide range of secret surveillance operations in fighting 
terrorism and crime.

The N.S.A.’s reliance on telecommunications companies is broader and 
deeper than ever before, according to government and industry officials, 
yet that alliance is strained by legal worries and the fear of public 
exposure.

To detect narcotics trafficking, for example, the government has been 
collecting the phone records of thousands of Americans and others inside 
the United States who call people in Latin America, according to several 
government officials who spoke on the condition of anonymity because the 
program remains classified. But in 2004, one major phone carrier balked 
at turning over its customers’ records. Worried about possible privacy 
violations or public relations problems, company executives declined to 
help the operation, which has not been previously disclosed.

In a separate N.S.A. project, executives at a Denver phone carrier, 
Qwest, refused in early 2001 to give the agency access to their most 
localized communications switches, which primarily carry domestic calls, 
according to people aware of the request, which has not been previously 
reported. They say the arrangement could have permitted 
neighborhood-by-neighborhood surveillance of phone traffic without a 
court order, which alarmed them.

The federal government’s reliance on private industry has been driven by 
changes in technology. Two decades ago, telephone calls and other 
communications traveled mostly through the air, relayed along microwave 
towers or bounced off satellites. The N.S.A. could vacuum up phone, fax 
and data traffic merely by erecting its own satellite dishes. But the 
fiber optics revolution has sent more and more international 
communications by land and undersea cable, forcing the agency to seek 
company cooperation to get access.

After the disclosure two years ago that the N.S.A. was eavesdropping on 
the international communications of terrorism suspects inside the United 
States without warrants, more than 40 lawsuits were filed against the 
government and phone carriers. As a result, skittish companies and their 
lawyers have been demanding stricter safeguards before they provide 
access to the government and, in some cases, are refusing outright to 
cooperate, officials said.

“It’s a very frayed and strained relationship right now, and that’s not 
a good thing for the country in terms of keeping all of us safe,” said 
an industry official who believes that immunity is critical for the 
phone carriers. “This episode has caused companies to change their 
conduct in a variety of ways.”

With a vote in the Senate on the issue expected as early as Monday, the 
Bush administration has intensified its efforts to win retroactive 
immunity for companies cooperating with counterterrorism operations.

“The intelligence community cannot go it alone,” Mike McConnell, the 
director of national intelligence, wrote in a New York Times Op-Ed 
article Monday urging Congress to pass the immunity provision. “Those in 
the private sector who stand by us in times of national security 
emergencies deserve thanks, not lawsuits.”

Attorney General Michael B. Mukasey echoed that theme in an op-ed 
article of his own in The Los Angeles Times on Wednesday, saying private 
companies would be reluctant to provide their “full-hearted help” if 
they were not given legal protections.

The government’s dependence on the phone industry, driven by the changes 
in technology and the Bush administration’s desire to expand 
surveillance capabilities inside the United States, has grown 
significantly since the Sept. 11 attacks. The N.S.A., though, wanted to 
extend its reach even earlier. In December 2000, agency officials wrote 
a transition report to the incoming Bush administration, saying the 
agency must become a “powerful, permanent presence” on the commercial 
communications network, a goal that they acknowledged would raise legal 
and privacy issues.

While the N.S.A. operates under restrictions on domestic spying, the 
companies have broader concerns — customers’ demands for privacy and 
shareholders’ worries about bad publicity.

In the drug-trafficking operation, the N.S.A. has been helping the Drug 
Enforcement Administration in collecting the phone records showing 
patterns of calls between the United States, Latin America and other 
drug-producing regions. The program dates to the 1990s, according to 
several government officials, but it appears to have expanded in recent 
years.

Officials say the government has not listened to the communications, but 
has instead used phone numbers and e-mail addresses to analyze links 
between people in the United States and overseas. Senior Justice 
Department officials in the Bush and Clinton administrations signed off 
on the operation, which uses broad administrative subpoenas but does not 
require court approval to demand the records.

At least one major phone carrier — whose identity could not be confirmed 
— refused to cooperate, citing concerns in 2004 that the subpoenas were 
overly broad, government and industry officials said. The executives 
also worried that if the program were exposed, the company would face a 
public-relations backlash.

The D.E.A. declined to comment on the call-tracing program, except to 
say that it “exercises its legal authority” to issue administrative 
subpoenas. The N.S.A. also declined to comment on it.

In a separate program, N.S.A. officials met with the Qwest executives in 
February 2001 and asked for more access to their phone system for 
surveillance operations, according to people familiar with the episode. 
The company declined, expressing concerns that the request was illegal 
without a court order.

While Qwest’s refusal was disclosed two months ago in court papers, the 
details of the N.S.A.’s request were not. The agency, those 
knowledgeable about the incident said, wanted to install monitoring 
equipment on Qwest’s “Class 5” switching facilities, which transmit the 
most localized calls. Limited international traffic also passes through 
the switches.

A government official said the N.S.A. intended to single out only 
foreigners on Qwest’s network, and added that the agency believed Joseph 
Nacchio, then the chief executive of Qwest, and other company officials 
misunderstood the agency’s proposal. Bob Toevs, a Qwest spokesman, said 
the company did not comment on matters of national security.

Other N.S.A. initiatives have stirred concerns among phone company 
workers. A lawsuit was filed in federal court in New Jersey challenging 
the agency’s wiretapping operations. It claims that in February 2001, 
just days before agency officials met with Qwest officials, the N.S.A. 
met with AT&T officials to discuss replicating a network center in 
Bedminster, N.J., to give the agency access to all the global phone and 
e-mail traffic that ran through it.

The accusations rely in large part on the assertions of a former 
engineer on the project. The engineer, who spoke on the condition of 
anonymity, said in an interview that he participated in numerous 
discussions with N.S.A. officials about the proposal. The officials, he 
said, discussed ways to duplicate the Bedminster system in Maryland so 
the agency “could listen in” with unfettered access to communications 
that it believed had intelligence value and store them for later review. 
There was no discussion of limiting the monitoring to international 
communications, he said.

“At some point,” he said, “I started feeling something isn’t right.”

Two other AT&T employees who worked on the proposal discounted his 
claims, saying in interviews that the project had simply sought to 
improve the N.S.A.’s internal communications systems and was never 
designed to allow the agency access to outside communications. Michael 
Coe, a company spokesman, said: “AT&T is fully committed to protecting 
our customers’ privacy. We do not comment on matters of national security.”

But lawyers for the plaintiffs say that if the suit were allowed to 
proceed, internal AT&T documents would verify the engineer’s account.

“What he saw,” said Bruce Afran, a New Jersey lawyer representing the 
plaintiffs along with Carl Mayer, “was decisive evidence that within two 
weeks of taking office, the Bush administration was planning a 
comprehensive effort of spying on Americans’ phone usage.”

The same lawsuit accuses Verizon of setting up a dedicated fiber optic 
line from New Jersey to Quantico, Va., home to a large military base, 
allowing government officials to gain access to all communications 
flowing through the carrier’s operations center. In an interview, a 
former consultant who worked on internal security said he had tried 
numerous times to install safeguards on the line to prevent hacking on 
the system, as he was doing for other lines at the operations center, 
but his ideas were rejected by a senior security official.

The facts behind a class-action lawsuit in San Francisco are also 
shrouded in government secrecy. The case relies on disclosures by a 
former AT&T employee, Mark Klein, who says he stumbled upon a secret 
room at an company facility in San Francisco that was reserved for the 
N.S.A. Company documents he obtained and other former AT&T employees 
have lent some support to his claim that the facility gave the agency 
access to a range of domestic and international Internet traffic.

The telecommunications companies that gave the government access are 
pushing hard for legal protection from Congress. As part of a broader 
plan to restructure the N.S.A.’s wiretapping authority, the Senate 
Intelligence Committee agreed to give immunity to the telecommunications 
companies, but the Judiciary Committee refused to do so. The White House 
has threatened to veto any plan that left out immunity, as the House 
bill does.

“Congress shouldn’t grant amnesty to companies that broke the law by 
conspiring to illegally spy on Americans” said Kate Martin, director of 
the Center for National Security Studies in Washington.

But Bobby R. Inman, a retired admiral and former N.S.A. director who has 
publicly criticized the agency’s domestic eavesdropping program, says he 
still supports immunity for the companies that cooperated.

“The responsibility ought to be on the government, not on the companies 
that are trying to help with national security requirements,” Admiral 
Inman said. If the companies decided to stop cooperating, he added, “it 
would have a huge impact on both the timeliness and availability of 
critical intelligence.”

Copyright 2007 The New York Times Company
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