U.S. Culling Verizon Phone Data Defended as Terror Shield

June 6 (Bloomberg) -- Bloomberg's Julianna Goldman reports that the Obama administration is collecting the telephone records of millions of U.S.-based Verizon customers as a tool in fighting terrorism, relying on a secret court order obtained under a George W. Bush administration policy. She speaks on Bloomberg Television's "Market Makers."

The Obama administration and Senate Intelligence Committee leaders of both parties defended the secret collection of telephone records of millions of U.S. residents as critical to combating terrorism, with one lawmaker saying such surveillance thwarted a “significant” plot.

As some members of Congress condemned the program as an intrusion in the lives of innocent Americans, the White House said Congress was regularly updated and all rules were followed. Lawmakers confirmed they knew of the classified court order compelling Verizon Communications Inc. (VZ) to provide data on its customers’ calls, continuing a George W. Bush administration policy that sparked a national controversy.

The publication of the secret court order by the U.K.-based Guardian newspaper renewed a political debate that has repeatedly flared since the Sept. 11, 2001, attacks about the proper balance between traditional American civil liberties and protection against terrorist threats. It came as President Barack Obama is being challenged over his regard for individual privacy and constitutionally guaranteed freedom of the press.

The Justice Department, as part of its inquiries into leaks of national-security information, has also obtained secret search warrants for telephone records of journalists from the Associated Press and Fox News, prompting protests from U.S. lawmakers and media-advocacy groups.

Photographer: David Paul Morris/Bloomberg

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People use their phones in front of a store in San Francisco.

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Photographer: David Paul Morris/Bloomberg

People use their phones in front of a store in San Francisco.

FBI Request

The telephone surveillance, sought by the Federal Bureau of Investigation and approved by the court on April 25, requires Verizon to provide the National Security Agency with information about calls inside the U.S. and between the U.S. and other countries on a daily and “ongoing” basis. The NSA runs computer centers for analyzing huge databases.

The Washington Post reported this evening that the NSA and FBI also are tapping directly into the central servers of nine leading U.S. Internet companies, capturing audio, video, photographs, e-mails, documents and connection logs. The Post said the operation, which began in 2007, has grown exponentially and become the most prolific contributor to the president’s daily intelligence briefing, providing raw material for almost 1 in 7 intelligence reports.

Microsoft Corp. (MSFT), Yahoo! Inc. (YHOO), Google Inc. (GOOG), Facebook Inc (FB)., PalTalk, AOL Inc. (AOL), Skype Technologies SA, Google’s YouTube, and Apple Inc. (AAPL) participate in the program, the Post reported. The White House did not immediately return telephone and e-mail requests for comment.

Photographer: Ryan Anson/Bloomberg

The Guardian newspaper last night disclosed a classified court order compelling U.S.-based Verizon Communications Inc. to provide data on its customers’ calls, continuing a George W. Bush administration surveillance policy that sparked a national controversy. Close

The Guardian newspaper last night disclosed a classified court order compelling... Read More

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Photographer: Ryan Anson/Bloomberg

The Guardian newspaper last night disclosed a classified court order compelling U.S.-based Verizon Communications Inc. to provide data on its customers’ calls, continuing a George W. Bush administration surveillance policy that sparked a national controversy.

Disrupting Plots

White House deputy press secretary Josh Earnest, commenting earlier today on the telephone surveillance program to reporters traveling with Obama on Air Force One, said any such monitoring is carried out “with the knowledge and oversight of Congress.” It doesn’t include listening to telephone calls, and he said the president’s paramount goal is to “disrupt plots that may exist.”

Earnest said the data collected relates to call details, such as the telephone numbers of the caller and recipient and the length of their conversation. Neither he nor lawmakers would say whether the government monitors calls through other telephone companies, though outside analysts said that was probably the case.

Senate Intelligence Committee Chairman Dianne Feinstein, a California Democrat, and Senator Saxby Chambliss of Georgia, the panel’s top-ranking Republican, told reporters that the surveillance is legal and that they have been kept informed under the law. The court order lasts three months and was a regular renewal of the legal authority, which has been going on for seven years, Chambliss said.

Congressman Pete Olson, a Texas Republican, discusses legislation he is co-sponsoring with Congressman Jim Costa, a California Democrat, on domestic alternative fuels. Close

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Congressman Pete Olson, a Texas Republican, discusses legislation he is co-sponsoring with Congressman Jim Costa, a California Democrat, on domestic alternative fuels.

Attacks Thwarted

“Terrorists will come after us if they can, and the only thing we have to protect us is good intelligence,” Feinstein said.

House Intelligence Committee Chairman Mike Rogers, a Michigan Republican, said telephone records collected under the surveillance program were used to thwart a “significant” terrorist plot within the “the last few years.” He declined to provide any details on the incident.

Some lawmakers blasted the breadth of the domestic surveillance. Senator Charles Schumer, a New York Democrat, demanded an explanation for a program he called “invasive.”

“One thing I have not heard is what the explanation is for needing to do this,” Schumer told reporters.

Senator Rand Paul, a Kentucky Republican, called the program “an astounding assault” on the U.S. Constitution.

‘New Low’

“After revelations that the Internal Revenue Service targeted political dissidents and the Department of Justice seized reporters’ phone records, it would appear that this administration has now sunk to a new low,” Paul said in a statement posted on his congressional website.

The order from the Foreign Intelligence Surveillance Court covers telephone numbers as well as the location and duration of calls, according to the order published by the Guardian and posted on its website.

Feinstein and Chambliss, briefing reporters, said the information collected is dumped into a government-maintained database and then used to respond to specific threats.

The surveillance program creates “a telephone book” of data and cannot be accessed without “reasonable, articulable suspicion that the records are relevant and related to terrorist activity,” Feinstein said.

Senate Majority Leader Harry Reid, a Nevada Democrat, joined them in defending the monitoring, saying it wasn’t new.

“Everybody should just calm down,” Reid said.

Obama ‘Responsibility’

His counterpart in the House, Republican Speaker John Boehner of Ohio, said Obama should explain to the American people what he’s doing that requires the intrusion. Obama has the “responsibility to outline what these tools are and how they are being used,” Boehner told reporters in Washington.

Representative James Costa, a California Democrat, told a Bloomberg Government breakfast this morning that the monitoring of telephone data “tests the faith and credibility of Americans about our government.”

Former vice president and Democratic presidential candidate Al Gore criticized the monitoring in a message to Twitter followers: “In digital era, privacy must be a priority. Is it just me, or is secret blanket surveillance obscenely outrageous?”

The disclosure may put further pressure on U.S. Attorney General Eric Holder, who is under fire for targeting reporters in the crackdown on leaks. It also may weigh on the nomination of Obama’s choice as the next FBI director, James B. Comey.

Disclosure Sought

Privacy-rights advocates issued swift protests upon learning of the Guardian report, calling the data collection an intrusion on millions of Americans. The American Civil Liberties Union called for the Obama administration to halt the program and disclose its scope and asked Congress to investigate.

Paul Bresson, an FBI spokesman, and Verizon spokesman Ed McFadden declined to comment.

The Verizon data-collection order was signed 10 days after the Boston Marathon bombing killed three people and injured more than 260 in the highest-profile terrorist incident on U.S. soil since 2001. U.S. agencies vastly expanded surveillance efforts during the past 12 years in a bid to avoid a repeat of the attacks on New York and the Pentagon.

The Bush administration started the so-called Terrorist Surveillance Program in the aftermath of the Sept. 11 attacks, when agencies began secretly conducting electronic surveillance on U.S. phone calls and e-mails without court warrants.

2008 Law

Congress passed a law in 2008 codifying parts of the program and authorizing intelligence agencies to get broad electronic surveillance orders from the Foreign Intelligence Surveillance Court.

That law, updating the more than three-decade-old Foreign Intelligence Surveillance Act, lets intelligence agencies monitor the e-mail, Internet activity and phone calls of non-U.S. citizens reasonably believed to be located outside the U.S. and involved in terrorist activities or other crimes. Congress voted last year to extend it until the end of 2017.

“We’ve been saying for over a decade that the law is incredibly broad and could be interpreted to allow something like this, but people didn’t believe it,” said Michelle Richardson, legislative counsel of the ACLU. “Now that there is hard proof, hopefully this will force Congress to take a look at it.”

Law Challenged

The Supreme Court has never ruled on the constitutionality of such a sweeping surveillance program. In February, the court voted 5-4 to bar a challenge by lawyers and civil rights activists to a federal law that allows government wiretapping of international phone calls and e-mails.

The majority didn’t rule on the surveillance program itself, instead saying the opponents lacked “standing” to sue because they hadn’t shown they were being harmed.

In 2012, there were 212 such FISA orders, known as “business records requests,” according to a letter from the Justice Department to Reid. The letter doesn’t specify the targets or scope of the requests.

The Guardian report marks the first time since broad surveillance was authorized in 2008 that an unredacted order has come to light.

“It confirms the worst fears that these tools are not being used in a targeted manner just against suspected terrorists and spies,” Richardson said.

Senators led by Paul and Oregon Democrat Ron Wyden tried and failed to amend last year’s legislation extending FISA so it would have included what they said were needed provisions to protect the constitutional rights of U.S. citizens.

“This sort of widescale surveillance should concern all of us and is the kind of government overreach I’ve said Americans would find shocking,” Senator Mark Udall, a Colorado Democrat, said in an e-mailed statement.

To contact the reporters on this story: Margaret Talev in Washington at mtalev@bloomberg.net; Chris Strohm in Washington at cstrohm1@bloomberg.net; Mike Dorning in Washington at mdorning@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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