by Tim Shorrock
As mentioned earlier, one of the most important national security tasks carried out by the telecommunications industry involves building classified computer and communications networks for the Pentagon and the Intelligence Community. These networks are discussed in a little-known institution in Washington called the National Security Telecommunications Advisory Committee (NSTAC). It is a group of executives from the communications and defense industries, all of whom hold security clearances, who advise the White House and senior government officials on security issues related to telecommunications. They meet at the White House once a year and hold quarterly meetings and conference calls with the Department of Homeland Security, the Office of the Director of National Intelligence, and other government agencies.
Prominent members of the committee, as of 2007, included Randall Stephenson, AT&T’s chairman and CEO, who is the vice chairman of the committee; Ivan G. Seidenberg, the chairman and CEO of Verizon; and Stanley Sigman, the president and CEO of AT&T subsidiary Cingular Wireless. In addition, four of the NSA’s most important contractors were also represented on the board: Ken Dahlberg, the chairman and CEO of SAIC, a former top executive at General Dynamics and Hughes Aircraft, Van B. Honeycutt, the chairman of Computer Sciences Corporation, which in 2007 won a three-year extension to its Groundbreaker contract with the NSA; Daniel J. Carroll, the president and CEO of Telecordia Technologies, an SAIC subsidiary that developed key data mining technologies for the NSA; and Arthur E. Johnson, the senior vice president of strategic development for Lockheed Martin, the world’s largest defense and intelligence contractor.
In 2006 and 2007, the NSTAC was addressed by both President Bush and Vice President Cheney. Asked if the NSA surveillance was ever discussed at these sessions, spokesman Stephen Barrett told me in an e-mail: “we do not participate in intelligence gathering.” Nevertheless, high-level intelligence officials are often in attendance at these meetings and are frequently asked to address the group. An NSTAC meeting on April 26, 2007, at the Washington headquarters of the U.S. Chamber of Commerce, for example, was addressed by DNI Mike McConnell as well as Air Force Lieutenant General Charles Croom, the director of the Defense Information Systems Agency, and Prescott Winter, the NSA’s chief technology officer, according to minutes posted on the NSTAC Web site.
Other meetings of the NSTAC in recent years were addressed by John Negroponte, McConnell’s predecessor as DNI; Dale Meyerrose, the associate director of national intelligence; and Brian Shaw, the National Intelligence Council’s deputy national intelligence officer for science and technology. The committee’s first meeting after 9/11, which took place on March 12 and 13, 2002, was addressed by three of the Bush administration’s top security officials: Deputy Secretary of Defense Paul Wolfowitz, Secretary of State Colin Powell, and National Security Adviser Condoleezza Rice. The session included a discussion titled “September 11 Lessons Learned,” led by Joseph DeMauro, Verizon’s vice president for the state of New York, and Kevin Lynch, vice president, AT&T Network Services. Although the details of these meetings are classified, the existence of the committee and the frequency of its interactions with senior intelligence officials illustrate the web of secret relationships between government and industry behind the U.S. telecommunications system. And according to the former chairman of the committee, former Qwest CEO Joseph P. Nacchio, telecom executives involved at that level of national security are often asked to participate in highly classified activities, including the NSA’s surveillance programs.
At the time of 9/11, Nacchio was the chairman of the NSTAC. Shortly after the attacks, he was asked, along with other telecom companies, to provide the NSA with access to the private telephone records of his customers with the aim of locating and tracking terrorist suspects and preventing future attacks. But Nacchio, in contrast to executives from AT&T and Verizon, refused; according to a statement released by company lawyers in 2006, when Nacchio learned that no legal authority for the request had been granted “and that there was a disinclination on the part of the authorities to use any legal process, including the Special [FISA] Court which had been established to handle such matters.” Nacchio concluded that “these requests violated the privacy requirements of the Telecommunications Act.”52 Nacchio left Qwest in 2006 after being charged with nineteen counts of insider trading on Qwest stock that took place in the spring of 2001. In the fall of 2007, while appealing his April 2007 conviction on those charges, Nacchio and his attorneys released further details of his relationship with the NSA. The documents, which were heavily redacted by the appeals court, were made public in October 2007 at the request of the Denver Post and have added significant new details to the story of the NSA’s ties with the telecom industry, both prior to and after 9/11.*
Qwest’s ties with U.S. intelligence apparently date back to 1997, when Nacchio and Dean Wandry, his director for government sales, were asked to meet with a “three-star lieutenant general” working for an unnamed government agency that was running “the largest telecom operation in the world.” Although that general is not identified in the redacted documents, a contextual analysis tells us he was probably the director of the NSA, who at the time was retired Air Force General Kenneth Minihan* (by law, the NSA director must be a three-star general or a vice admiral; at the same time, the NSA’s global communications network is known to be the largest one in the U.S. government and one of the largest in the world). After hearing from Nacchio about the capabilities of Qwest’s commercial networks, “the general” told the Qwest executives that he wanted to use their networks “for government purposes.” He later informed Nacchio that “there was a big opportunity” for Qwest and asked Nacchio to obtain a security clearance, which he did. Qwest was subsequently awarded a major contract to build a government communications system in 1999.53
By early 2001, the NSA (now identified in the document by name) had a project it wanted to discuss with Qwest—Project Groundbreaker, that massive project described earlier that involved the outsourcing of the NSA’s internal, non-mission-critical communications systems. Qwest’s proposed portion of Groundbreaker apparently consisted of a $50-million to $100-million opportunity to construct a fiber-optic network for the agency. “The contemplated work was similar to what Qwest had already done for” the U.S. government, Nacchio’s attorney wrote in his brief. By this time, Qwest was a member of the Computer Sciences Corporation team that eventually won the prime contract for Groundbreaker. As a member of the CSC team, according to the affidavit, Nacchio met with NSA officials at Fort Meade on February 27, 2001, to discuss Qwest’s role as a subcontractor.
Nacchio now claims that he was asked at that meeting to provide to the NSA information about Qwest customers and the traffic moving across his network. That is a significant admission: it indicates that, only a month into the Bush administration, U.S. intelligence officials were making inquiries to the industry about their possible participation in eavesdropping operations. Shane Harris, who covers the NSA for the National Journal, partially confirmed Nacchio’s account in November 2007. According to a former White House intelligence official quoted by Harris, the NSA wanted Qwest to build a “private version of Echelon,” the signals intelligence system developed in the 1990s by the NSA and its counterparts in the U.K., Canada, Australia, and New Zealand. Such a system, the former official said, would have allowed the agency to use Qwest’s network to “watch for computer hackers and foreign-government forces trying to penetrate and compromise US government information systems.” The NSA “in effect wanted Qwest to be the agency’s online eyes and ears,” Harris concluded.54 But Nacchio rejected the request, citing the same privacy concerns that he offered after 9/11.*
At the time of his meetings with the NSA, Nacchio was optimistic about his company’s prospects. According to his affidavit, he walked out of the meeting with NSA “thinking that the NSA $50–$100 million opportunity [in Groundbreaker] remained viable.”55 But that optimism—along with Qwest’s stock—sank in 2002 when the NSA awarde
d the contract to another unnamed company, according to Nacchio’s documents. (By disclosing that information to the court, the Denver Post concluded, “Nacchio wanted to show that he didn’t sell Qwest stock illegally in early 2001 and that he was upbeat about Qwest’s stock because he had top-secret information that the company would win lucrative government contracts.”)56 Nacchio never got the chance to air his claims in open court, however. In December 2006, U.S. District Judge Edward Nottingham ruled that the “inference of a causal connection between Mr. Nacchio’s refusal [to cooperate with the NSA] and the fact that Qwest didn’t end up with the [Groundbreaker] contract is extremely weak” and therefore inadmissible.57 After Nacchio’s documents were unsealed by the court in October 2007, government attorneys further undercut Nacchio’s arguments by filing their own papers. According to their affidavit, Qwest “was not ‘left off’ the list of subcontractors for the Groundbreaker project” and was one of dozens of contractors included in the Eagle Alliance, the contractor coalition put together by CSC.58 Their finding “only strengthens the court’s conclusion” that Nacchio’s arguments lacked merit, the prosecutors said.59 But it left many journalists and observers convinced that the close ties between the NSA and the telecommunications industry were forged long before the events of September 11, 2001.
The CSC/Qwest team, which also included General Dynamics, Verizon, TRW, and Northrop Grumman, was one of three consortiums that bid for Project Groundbreaker. The others were led by AT&T, which was allied with IBM, Lockheed Martin, and SAIC, and OAO Corporation, an intelligence contractor acquired in December 2001 by Lockheed Martin, which was allied with Raytheon, WorldCom (later acquired by MCI), ManTech, and Electronic Data Systems. As part of the bidding process, which lasted more than two years, all of these companies would have met, as Qwest did, with the NSA and been provided with classified contract information available to every other executive on a bidding team with a security clearance. And once the contract was awarded, CSC, Qwest, and their partners in the Eagle Alliance would have had access to classified information about the NSA’s signals intelligence programs.*
Nacchio’s documents about Qwest’s ties with the NSA, and the fact of the existence of the bidding consortiums themselves, illustrate the depth of the NSA’s ties with industry. They also help explain how discussions of classified communications systems prior to 9/11 could have led, almost seamlessly, to administration requests for cooperation on secret programs such as the Terrorist Surveillance Program. But most importantly, they provide the context in which the Bush administration and the Intelligence Community began their legislative offensive to rewrite the Foreign Intelligence Surveillance Act to make domestic spying easier and provide retroactive immunity to the corporations who aided in their wiretapping efforts.
The president’s bill, which he called the Protect America Act (PAA), was introduced shortly after the FISA court made its first-ever ruling against the NSA. After Bush returned his initial surveillance program back to the jurisdiction of the FISA court in January 2007, the NSA reportedly began asking for “basket warrants” that encompassed multiple targets, as opposed to FISA warrants on individuals that were issued on a case-by-case basis. Some of these warrants were approved; but at some point in the spring of 2007, a judge on the FISA court ruled that the practice violated FISA and was therefore illegal. House Minority Leader John A. Boehner, R-Ohio, disclosed the secret ruling in an interview with Fox News, saying that the decision prohibited “the ability of our intelligence services and our counterintelligence people from listening in to two terrorists in other parts of the world where the communication could come through the United States.”60 Despite the security breach, the administration leaped at the chance to use the ruling to its advantage. As long as the FISA ruling stood, McConnell warned, U.S. spy agencies were missing “a significant portion of what we should be getting.” That included, he said (erroneously as it turned out), cell-phone communications between Iraqi insurgents that happened to cross the U.S. phone system.
Faced with the possibility of being labeled “soft on terrorism,” congressional Democrats agreed in August 2007 to temporarily expand the ability of the NSA to eavesdrop, without warrants, on telephone calls, e-mail and faxes passing through telecommunications hubs in the United States. They also provided legal cover to the pipelines to the Internet and the global phone system made available to the NSA by the telecom industry. As James Risen explained in the New York Times, the new law allowed the NSA to eavesdrop without warrants “by latching on to” giant telecommunications switches located in the United States “as long as the target is ‘reasonably believed’ to be overseas. For example, if a person in Indianapolis calls someone in London, the [NSA] can eavesdrop on that conversation without a warrant, as long as the NSA’s target is the person in London.”61* In addition, Congress approved an amendment that cut the secretive FISA court out of decisions involving the NSA’s monitoring of communications entering the United States but involving foreigners subject to national security investigations. That power was transferred from the court to the Director of National Intelligence and the Attorney General.†
The FISA bill drew sharp criticism from legal scholars. Martin S. Lederman, a former attorney in the Department of Justice’s Office of Legal Counsel from 1994 to 2002 and a professor of law at the University of Michigan, blasted the legislation for deleting a key provision in FISA—that foreign intelligence could only be gathered in the United States against agents of a foreign power and suspected terrorists. Under the FISA exemptions approved by Congress, he wrote shortly after the bill was passed, “there is no requirement that [surveillance] be conducted outside the U.S.; no requirement that the person at whom it is ‘directed’ be an agent of a foreign power or in any way connected to terrorism or other wrongdoing.” If the law was read literally, he added, “it would exclude from FISA any surveillance that is in some sense ‘directed’ both at persons overseas and at persons in the U.S.”62 In other words, United States persons could easily get caught in the NSA dragnet.
As this book neared completion, the Bush administration, led by Vice President Cheney and Admiral McConnell, were pressing Congress to make the Protect America Act permanent (it was set to expire on February 1, 2008) with two additional measures: a ban on lawsuits against telecommunications and other companies for giving the government access to information, including customer phone records, in connection with the NSA’s surveillance program, and immunity from civil and criminal liability for any persons and companies “alleged to have cooperated” with the program. They also asked that all legal cases regarding NSA surveillance—including lawsuits—be removed from the federal court system and heard only in the secret FISA court. If enacted, the proposals would represent “the most significant change to the (FISA) statute since its enactment in 1978,” Senator Rockefeller declared when the package was proposed (he ended up supporting the immunity request and, after his committee approved it by a slim majority, introduced the president’s bill on the Senate floor).63
From the moment the immunity measure was debated on Capitol Hill, the industry, which had kept a low profile during earlier debates about FISA, began a furious, behind the scenes lobbying campaign. Without retroactive protection, AT&T, Verizon, and other companies feared they would be forced to terminate their partnership with the Intelligence Community, losing millions of dollars in revenue (the partnerships aren’t free, after all) and millions more in fines for violating FISA and privacy laws if the courts found the program was illegal—a distinct possibility. “It’s not an exaggeration to say the U.S. intelligence community is in a near-panic about this,” an industry lawyer told Newsweek, which broke the story of the lobbying initiative.64* But due to strong opposition from a handful of Democrats, including Senators Christopher Dodd of Connecticut and Russ Feingold of Wisconsin, neither the industry nor the administration was able to convince a majority of the Senate to vote their way. If that stalemate continues past mid-February, when the Protect A
merica Act (under a fifteen-day extension passed by Congress on January 31) expires, the NSA and its industry allies will have to revert back to FISA as it existed before October 2001, when Bush and Cheney decided to circumvent the law and proceed with electronic surveillance without warrants. To many observers, that was a much safer alternative than the new bill.
The bitter debate about FISA badly damaged Admiral McConnell’s reputation in Congress. Lawmakers who negotiated with the former admiral accused him of exaggerating the amount of actionable intelligence that was being missed without the new law and of withdrawing, without explanation, administration offers that the Democrats thought they had agreed to. They also came to believe that McConnell was purposely exaggerating the potential dangers of keeping FISA as it was (“You won. But you did so at a substantial price, one that will be paid in rancor, suspicion, and distrust,” Senator Sheldon Whitehouse of Rhode Island wrote him during the summer recess in 2007, after Congress passed the president’s bill.65) But throughout the discussions, McConnell insisted that the NSA’s surveillance programs had been instrumental in preventing further terrorist attacks. During one hearing early in his tenure, McConnell was asked by Christopher “Kit” Bond, R-Missouri, the vice chairman of the Senate Intelligence Committee, to delineate the importance of FISA. McConnell replied by looking back over his past eleven years in the intelligence industry. When he left the NSA in 1996 for Booz Allen Hamilton, he said, FISA surveillance was “almost insignificant.” But after only ten weeks on the job as director of national intelligence, he could “immediately see the results of FISA-authorized collection activity,” he said. “I cannot overstate how instrumental FISA has been in helping the intelligence community protect the nation.”66
